Supplementary Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)General outline and financial impact
Amendments to the New Business Tax System (Taxation of Financial Arrangements) Bill (No. 1) 2003
The New Business Tax System (Taxation of Financial Arrangements) Bill (No. 1) 2003 (the bill) introduces new rules into the Income Tax Assessment Act 1997 which:
- •
- remove the taxing point at conversion of convertible and exchangeable notes;
- •
- provide for the taxation of gains and losses on foreign currency transactions; and
- •
- provide for the translation of amounts of foreign currency for Australian income tax purposes.
The amendments to the bill apply to elections and choices contained in Schedule 4 to the bill. This Schedule contains measures relating to the treatment of foreign currency transactions and the taxation of gains and losses from those transactions. The amendments will allow the elections and choices in the bill to be made with effect from 1 July 2003 or, in some cases, another date specified by the relevant entity. These amendments are necessary because the bill was not enacted prior to 1 July 2003.
The amendments will also include a number of technical amendments to the bill.
Date of effect: The amendments will apply to elections made under proposed Division 775 or proposed Subdivision 960-D and made between the date on which the bill receives Royal Assent and 30 days after that date. The amendments have no impact on the date of effect of the remainder of the bill.
Proposal announced: The amendments were announced by the Minister for Revenue and Assistant Treasurer.
Financial impact: The amendments are expected to result in a negligible revenue cost.
Compliance cost impact: The amendments are designed to ensure that compliance cost saving measures in the bill are available to taxpayers from the bill's commencement date as was intended when the bill was introduced. There is no additional compliance impact resulting from the amendments.
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).